ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a large number of sellers and buyers.
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diverse products.
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sellers acting together to set prices.
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uninformed buyers and sellers.
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Detailed explanation-1: -Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Companies earn just enough profit to stay in business and no more. If they were to earn excess profits, other companies would enter the market and drive profits down.
Detailed explanation-2: -The three primary characteristics of perfect competition are (1) no company holds a substantial market share, (2) the industry output is standardized, and (3) there is freedom of entry and exit. The efficient market equilibrium in a perfect competition is where marginal revenue equals marginal cost.
Detailed explanation-3: -Perfect Competition : The number of buyers and sellers in the market is very large. These buyers and sellers compete among themselves. Due to the large number, no buyer or seller influences the demand or supply in the market.
Detailed explanation-4: -Perfect competition occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.
Detailed explanation-5: -A large number of buyers and sellers. Homogenous products. Free exit and entry of firms. Perfect knowledge among buyers and sellers. No transport costs. Perfect mobility of factors of production. No promotional and selling costs.